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Accounting a Credit Under Operating Expenses

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					ACCOUNTING FOR DEFAULTED GUARANTEED LOANS
             WITH COLLATERAL
    UNDER THE CREDIT REFORM ACT OF 1990
   (PRESENT VALUE REPORTING APPROACH)




                 Prepared by the
     Financial Standards Reporting Division
         Financial Management Service
           Department of the Treasury



              September 22, 1998
 ACCOUNTING FOR COLLATERAL AND ESCROW TRANSACTIONS FOR A LOAN
    GUARANTEE PROGRAM UNDER THE CREDIT REFORM ACT OF 1990
              (PRESENT VALUE REPORTING APPROACH)




INTRODUCTION

This case is intended to illustrate accounting for transactions involving loan collateral
and escrow events in a manner which supports reporting these events at the net
present value of their cash flows to and from the government. Historical information
about htis case is related in the history section of the supplemental Credit guidance
section.
Only the transactions involving collateral and escrow are illustrated; agencies are
referred to the other cases and the Present Value Monograph for additional
transactions. The case assumes that loans guaranteed by the financing fund
defaulted; that the loans were transferred to the financing fund from the private lenders;
that the government assumed collection of the loans and interest; that defaults on the
transferred loans resulted in seizure of collateral property; and that the seized property
was maintained, rented, and sold. The terms of the seizure include one situation each
in which property was seized with and without recourse and, for each, sold for more
than the amount of the loan and cost and for less than that amount. In addition, the
case provides accounting for an escrow account established to collect and pay property
taxes and insurance, which is required for some programs. That accounting includes
collection and disbursement of the monies and provides transactions for earned and
unearned revenue. This case has been designed for a loan guarantee program.
However, note that, once Loans Receivable have been placed on the books of the
financing fund due to loan guarantee defaults, the accounting is the same as in a direct
loan financing fund.

This case does not deal with making direct loans and guarantees, subsidy re-
estimates, modifications, or borrowing, and does not illustrate program fund
transactions related to the case. This case also does not attempt to calculate interest
or subsidy amounts, which are assumed for purposes of illustration. The Office of
Management and Budget (OMB) has provided guidance on the methodology for
computing subsidy amounts and determining interest rates to be used.

The case sets forth an overall conceptual framework for both budgetary and proprietary
accounts used. Budgetary and proprietary entries are provided for each transaction.
Budgetary reports illustrated include SF 132 - Apportionment Schedule, SF 133 -
Report on Execution, Program and Financing Schedule, and TFS 2108 - Year-End
Closing Statement, and are presented for the financing fund.


                                           -2-
The proprietary financial statements prescribed by OMB in its Bulletin 97-01 "Form and
Content of Agency Financial Statements", dated November 16, 1996, are illustrated
with SGL crosswalks.

The case has been coordinated with OMB and with the Standard General Ledger
Board. Questions may be directed to the FSRD on (202) 874-9980. This case may be
obtained by sending a stamped, self-addressed mailer and a high density disk (3 1/2)
to:

                    Financial Standards and Reporting Division
                    Financial Management Service
                    3700 East West Highway, Room #213A
                    Hyattsville, MD 29782




                                         -3-
CONCEPTUAL FRAMEWORK ---FINANCING FUND

The basic budgetary accounting equation to be satisfied by the financing fund
accounting entries is shown in the table below, along with Standard General Ledger
account titles and numbers used.

 Budgetary Authority/                                 Status of Budgetary
 Resources to be Controlled                           Authority/Resources
                                                  =
 Anticipated Resources                                4450 Unapportioned Authority -
                                                               Available
 4060 Anticipated Non-Fed Collections                 4510 Apportionments - Available
 4070 Anticipated Federal Collections                 4590 Apportionments -
                                                               Unavailable
 Actual Resources                                     4610 Allotments - Realized
                                                               Resources
 4261 Actual Collections of Fees                      4801 Undelivered Orders-Unpaid
 4262 Actual Collections of Loan Principal            4802 Undelivered Orders-Paid
 4263 Actual Collections of Loan Interest             4901 Expended Authority-Unpaid
 4264 Actual Collections of Rent                      4902 Expended Authority-Paid
 4265 Actual Collections of Sales Proceeds
 4273 Actual Collections of Treasury
      Interest


 For purposes of facilitating closing entries
 only:

 4001 Anticipated Total Resources
 4201 Actual Total Resources

1.    Status accounts are for all resource accounts taken as a group. Individual
      resources accounts do not have related status accounts. In addition, it is
      important to note that obligations may be incurred and authority expended only
      on the basis of actual Non-Federal resources, not based on anticipated
      amounts.
2.    Commitments are omitted from the status accounts, as commitment accounting
      is not used in the case. Agencies may use commitment accounting if they find it
      useful and appropriate.

3.    Account numbers are SGL numbers.


                                            -4-
4.    Note that no budgetary accounts are required for the escrow deposit fund in the
      case (see the proprietary account listing and footnote 1 on page 8).

In addition, an apportionment ledger by spending object, as detailed on line 8 of the
SF- 132, "Request for Apportionment Under Credit Reform," is required. Line 8 of the
SF- 132 prescribes the maximum amount that may be spent for the objects detailed
there absent additional OMB approval. For this case, the objects to be controlled are:

      • Defaults; and

      • Operating Expenses.

Because the case focuses on escrow accounts and collateral property, there are fewer
objects than if a complete set of transactions were included. The case does not, for
instance, control objects for the guaranteed loan level or interest payable to Treasury.




                                          -5-
The new OMB Circular 97-01 “Form and Content” requires reporting of principal
outstanding in the Footnotes.


         FINANCING FUND MEMORANDUM ACCOUNTING FRAMEWORK
                     For Guarantee Principal outstanding

     Principal Outstanding                      =                         Status of Authority

     8050 (GL) Principal Outstanding                     8053 (GL) New Disbursements by Lenders
     8065 (GL) Principal Reductions                      8070 (GL) Net Disbursements




The basic proprietary accounting equation to be satisfied by the financing fund accounting
entries is:

    ASSETS       =       LIABILITIES            +        ( EQUITY) NET POSITION

The specific proprietary accounts used in the case are listed below.

Assets

1010 Fund Balance with Treasury
1190 Escrow Cash [a deposit fund; agencies should not intermix
       operating cash with cash received in trust from the public]1
1350 Loan Receivable
1340 Loan Interest Receivable
1399 Allowance for Subsidy
1551 Foreclosed Property
1559 Foreclosed Property - Allowance
Liabilities



1
 In practice, "Escrow Cash" would be called "Fund Balance With Treasury" and recorded under its own
fund symbol separate from that of the financing fund. To avoid having to label cash as "Fund Balance
With Treasury - Operating" and "Fund Balance With Treasury - Escrow" (or to create and maintain a
separate fund in the case illustration), the separate account for "Escrow Cash" has been established for
the case. Whenever a journal entry involves a debit or credit to this account, it would be made on the
books of the deposit fund rather than the financing fund.


                                                       -6-
2110 Accounts Payable
2180 Loan Guarantee Liability
2400 Liability to Disburse Escrow Cash

 Capital

 3310 Cumulative Results of Operations

 Financing Sources and Revenues

 5300 Interest Income - Treasury
 5300 Interest Income - Loans
 5300 Interest Income - Subsidy

 Expenses

 6330 Interest Expense - Loan Guarantee Liability




                                           -7-
STATUS OF ACCOUNTS AT START OF FISCAL YEAR 1997

The case begins as of October 1, 1996, which is a year sometime after inception of the fund on
October 1, 1991. The opening budgetary, proprietary and financing fund memorandum trial
balances are shown below.

                                   Loan Guarantee Financing Fund
                                      Budgetary Trial Balance
                                         October 1, 1996

 4201 Total Actual Resources                                       $495,000
 4450 Unapportioned Authority                                                   $495,000
                                                                   $495,000     $495,000




                                   Loan Guarantee Financing Fund
                                      Proprietary Trial Balance
                                         October 1, 1996
 1010 Fund Balance with Treasury                                   $495,000
 2180 Loan Guarantee Liability                                                $495,000
                                                                   $495,000   $495,000




                                   Financing Fund Memorandum
                                            Trial Balance
                                          October 1, 1996
 8050 Guaranteed Loan Principal Outstanding                        $900,000
 8070 GL - Net Disbursements                                                  $900,000
                                                                   $900,000   $900,000




TRANSACTIONS

This case assumes that there are $900,000 of Guaranteed Loan Principal Outstanding at the
beginning of the year. [Note that these transactions relate only to prior loan guarantees.
Transactions for new loan guarantees in Fiscal Year 97 and subsequently are not illustrated.
See the Loan Guarantee Case Study for illustrations on accounting for new loan guarantees.]




The fund anticipated the following budgetary resources from collections for Year 1997:


                                                  -8-
Federal
Treasury interest         $40,000

Non-Federal

Fees                       $ 2,000
Loan principal              20,000
Loan interest               30,000
Rental of seized collateral 8,000
Sale of seized collateral 340,000 400,000

Anticipated Total Resources $440,000


It was expected that the resources would be used for the following purposes:

Defaults                  $350,000
Operating Expenses          90,000 $440,000


(The operating expenses are for the repairs and maintenance of the seized collateral.)

1. These amounts were requested for apportionment from OMB via the SF-132-
Apportionment Schedule.

Budgetary entry
 4070 Anticipated Federal Collections                 40,000
 4060 Anticipated Non-Federal Collections            400,000
     4450 Unapportioned Authority - Available                        440,000

Proprietary entry
None




                                             -9-
                           LOAN GUARANTEES FINANCING FUND
             SF-132 APPORTIONMENT AND REAPPORTIONMENT SCHEDULE
     PROGRAM LEVEL
1. Guaranteed loan levels:
     A. Current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
     B. Unused from prior years
        Application:
2. Apportioned:
     Category A:
        (1.) First Quarter
        (2.) Second Quarter
        (3.) Third Quarter
        (4.) Fourth Quarter
     Category B:
        (1.) General Business Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
        (2.) Minority Enterprise Loans

    BUDGETARY RESOURCES
1. Budget Authority:
    A. Appropriations
    B. Borrowing Authority
    C. Contract Authority
    D. Net Transfers, cur yr authority(+or-)
    E. Other
2. Unobligated Balance:
    A. Brought forward October 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495,000
    B. Net transfers pr yr bal, actual (+or-)
    C. Anticipated Transfers pr yr bal (+or-)

3. Spending Auth from offsetting collections (Gross)
    A. Earned:
       1. Collected
       2. Receivable from Federal sources
    B. Change in Unfilled Customers' Orders (+or-):
       1. Advance received
       2. Without advance from Federal sources
    C. Anticipated for rest of year:
       1. Advance for anticipated orders
       2. Without advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440,000
    D. Transfers from Trust Funds:
       1. Collected
       2. Anticipated



                                                                - 10 -
4. Recoveries of prior year obligations:
    A. Actual
    B. Anticipated

5. Temporarily not available pursuant to P.L.                     (-)

6. Permanently not available:
     A. Cancellation of expired and no-yr accounts(-)
     B. Enacted rescissions of prior yr balances(-)
     C. Capital transfers and redemptions of debt(-)
     D. Other authority withdrawn(-)
     E. Pursuant to P.L.         (-)
     F. Anticipated for rest of year(+or-) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Total Budgetary Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          935,000

      APPLICATION OF BUDGETARY RESOURCES

8. Apportioned:
    Category A:
       (1) First quarter
       (2) Second quarter
       (3) Third quarter
       (4) fourth quarter

      Category B:
         (1) Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,000
         (2) Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000

9. Withheld pending rescission

10. Deferred

11. Unapportioned balance of revolving fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495,000

12. Total Budgetary Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          935,000




                                                              - 11 -
                                     SGL CROSSWALK
                                     1 OCTOBER 1997


SF-132 APPORTIONMENT SCHEDULE FOR LOAN GUARANTEES


Program Level:


Budgetary Resources:

  Line 2a                 4201 Total Actual Resources

  Line 3c2                4060 Anticipated Collections - Non-Federal
                          4070 Anticipated collections - Federal

  Line 7                  Computation

  Line 8b1                4450 Unapportioned Authority *


  Line 8b2                4450 Unapportioned Authority *


  Line 11                 4450 Unapportioned Authority - Available*

  Line 12                 Computation




* Agencies must use subsidiary ledgers or additional data elements to provide the necessary
breakout within 4450 Unapportioned Authority.




                                            - 12 -
2. The Office of Management and Budget approved the SF-132 and apportioned the funds as
requested. That form is illustrated on the preceding pages.

Budgetary entries

4450 Unapportioned Authority - Available                      440,000
    4510 Apportionments - Available                                         440,000

{Subsidiary Apportionment ledger entries:

 Objects                   Apportionments
 Defaults                  $350,000
 Operating Expenses          90,000}

b. Proprietary entry
  None

3. The agency head allotted the authorities above.

 a. Budgetary entries
 4510 Apportionments                                                    440,000
     4610 Allotments - Realized Resources                                              440,000

{Subsidiary Apportionment ledger entries:

 Objects                   Apportionments              Allotments

 Defaults                  ($350,000)                  $350,000
 Operating Exp.              ( 90,000)                   90,000}


* * * Transactions 4, 5, and 6 should take place simultaneously. They are separated in the
case for purposes of distinguishing the distinct types of transactions that occur at the same
time. * * *

4. Lenders presented demands for $350,000 for four guaranteed loans which had defaulted.
The claims were approved and the amounts paid.

Budgetary entry
 4610 Allotments - Realized Resources                                   350,000
     4902 Expended Authority - paid                                                    350,000



                                              - 13 -
[Note that the payments could have been obligated before the authority was expended. The
entry above expends the authority without an intermediate obligation stage.]

{Subsidiary Apportionment Ledger entries:

    Objects                       Allotments              Expended Authority

    Defaults                     ($350,000)                         $350,000}

Proprietary entry
    2180 Loan Guarantee Liability                                                     350,000
        1010 Fund Balance with Treasury                                                                   350,000

LLT

8065 GL - Principal Reductions                                                       350,000
    8050 GL - Principal Outstanding                                                                       350,000

5. In conjunction with the defaults, the right to collect principal and accumulated interest on the
four guaranteed loans was turned over to the agency, which will attempt to collect them. The
terms of the guarantee were such that the full amount of loans and interest involved were to be
given to the government (which had guaranteed 70% of them), along with any collateral
property. The lender has no further recourse after receiving payment. Details of the four loans
are shown below.
                                                                         Estimated
                                                                         Allowance for
 Loan      Principal               Interest                 Total        Subsidy

    A          $100,000                   $50,000                  $150,000         $120,000
    B            80,000                    20,000                   100,000           80,000
    C            75,000                    60,000                   135,000          108,000
    D            70,000                    45,000                   115,000           92,000

Total           $325,000                  $175,000                 $500,000         $400,000


The allowance for subsidy would be estimated at the time of seizure. The allowance amounts
here are assumed for purposes of illustration, and each loan is assumed to have a separate
rate of allowance.2

2
 The illustration using four different rates of allowance is not intended to imply that subsidy calculations
are made loan by loan. Four different rates are used here to allow illustrate through subsequent
transactions what under conventional accounting would be a gain and a loss from collateral transactions

                                                        - 14 -
Budgetary entry
None [Note that resources from nonfederal collections are only realized when             collect
                                                                                         ed.]

Proprietary entry
 1350 Loans Receivable                                                325,000
 1340 Loan Interest Receivable                                        175,000
     1399 Allowance for Subsidy                                                       400,000
     2180 Loan Guarantee Liability                                                    100,000

[Note that the reason the Loan Guarantee Liability is credited is that the liability account is
debited when the default payments accrue (see transaction #4). To the extent that the
government is able to make collections the third-party lender could not, bad debts associated
with the default claims in transaction #4 are recaptured. The amount of the estimated
recapture at the time the government assumed collection of the loans and interest involved,
$100,000, is thus credited back to the Loan Guarantee Liability account.]

6. Escrow accounts to pay property taxes and insurance for each of the loans were received
from the lender as follows:

Loan         Escrow Amount

 A           $1,200
 B            1,400
 C              600
 D              800
             $4,000

The escrow cash was placed in a deposit fund account which can only be used for purposes of
the escrow. The program fund provided insurance and charged fees to the
borrowers to cover costs. Collections of insurance premiums are made in advance and
disbursed from the escrow account to the financing account periodically in the amount of
premiums earned. Should a loan be paid in full prior to the use of all premiums paid in
advance, the amount of the unearned premiums would be returned by the escrow fund to the
borrower.

Budgetary entry
 None [There are no budgetary accounts for deposit funds.]

Proprietary entry


for both "with recourse" and "without recourse" loans.

                                                         - 15 -
 1190 Escrow Cash                                                      4,000
     2400 Liability to Disburse Escrow Cash                                              4,000

[Note that this entry will be made on the books of the escrow deposit fund. See footnote 1 on
page 8.]

7. Additional interest on the loans was accrued, as follows:
 Loan      Interest

 A         $10,000
 B           8,000
 C           7,500
 D           7,000
           $32,500

Budgetary entry
None

Proprietary entry
 1340 Loan Interest Receivable                                        32,500
     5300 Interest Income - Borrowers                                                32,500

8. Collections from the debtors were received—all interest. The detail is shown below.

           Interest
Loan       Collected

 A         $20,000
 B            5,000
 C            9,000
 D            6,000
            $40,000




                                              - 16 -
Budgetary entry
 4263 Actual Collections of Loan Interest                          40,000
     4060 Anticipated Non-Federal Collections                                      40,000


Proprietary entry
 1010 Fund Balance with Treasury                                   40,000
     1340 Loan Interest Receivable                                                 40,000

9. Payments were made from the escrow fund as follows:

Loan       Taxes         Insurance            Total       New Balance

 A      $ 1,000          $ 200               $ 1,200            $ 0
 B          600            400                 1,000             400
 C          700            100                   800            -200
 D          400            300                   700             100

Total   $ 2,700          $ 1,000             $ 3,700             $300

Budgetary entry
 4261 Actual Collections of Fees                                     1,000
     4060 Anticipated Non-Federal Collections                                       1,000

Proprietary entry
 2400 Liability to Disburse Escrow Cash                              3,700
     1190 Escrow Cash                                                               3,700

[Remember that this entry would be made on the books of the escrow deposit fund account,
while the one below would be made on the books of the financing fund. See footnote 1 on
page 8]
                                         - and -




                                           - 17 -
 1010 Fund Balance with Treasury                                       1,000
     1399 Allowance for Subsidy                                                        1,000

[Note that the fees income is from insurance. See explanation of insurance in the narrative
for transaction #6.]

10. $200 was spent from Fund Balance with Treasury to advance monies to the escrow fund
for the overdisbursement related to loan C.

Budgetary entry
 4610 Allotments - Realized Resources                                    200
     4902 Expended Authority - paid                                                      200

{Subsidiary Apportionment Ledger entries:
Objects                  Allotments                    Expended Authority

Operating Exp.            ($200)                             $200}

Proprietary entry
 1350 Loans Receivable - Borrower C                                      200
     1010 Fund Balance with Treasury                                                     200

[Remember that this entry would be made on the books of the financing fund, while the one below
would be made on the books of the escrow deposit fund account. See footnote 1 on page 8.]

Proprietary entry
 1190 Escrow Cash                                                        200
     2400 Liability to Disburse Escrow Cash                                              200

11. The debtor for loan C paid $150 of the escrow advance made in his behalf. The
 escrow account paid this $150 to the financing fund in partial satisfaction of the advance    in
transaction #10.

Budgetary entry
 4902 Expended Authority - paid                                          150
     4610 Allotments - Realized Resources                                                150




                                             - 18 -
{Subsidiary Apportionment Ledger entries:

  Objects                           Allotments            Expended Authority

  Operating Exp.                           $150                  (150)}

Proprietary entry
 1010 Fund Balance with Treasury                                               150
     1350 Loans Receivable - borrower C                                                        150

12. The four loans and interest were all declared in default, and collateral property was seized.
Estimated fair market value of the properties and liens thereon are as shown below:

                    Fair Mkt.         Liens                               Net Value
Loan                 Value          Outstanding                           Received

 A             $ 70,000                   $0                              $ 70,000
 B               40,000                3,000                                37,000
Subtotal A & B 110,000                 3,000                               107,000

 C                   25,000            2,000                                23,000
 D                   80,000                 0                               80,000
Subtotal C & D      105,000             2,000                              103,000

Grand Total         $215,000           $ 5,000                            $210,000


The terms of the loan contracts provide that seized collateral property under loans A and B is
seized without recourse—that is, in full settlement of the loans and interest receivable on
default, regardless of the amount of proceeds from selling the property. Property seized in
conjunction with loans C and D is seized with recourse, meaning that if it is sold for less than
the amount of the loan, interest, and capitalized costs, the borrower still owes any difference.
Any gain from the sale of property seized with recourse is refunded to the borrower. The
contracts for property seized with recourse further provide that any income from renting the
property prior to sale reverts to the government.

[This entry would only be made if the transaction was incurred in the same year as the loan
originally defaulted (see transaction 5). If this transaction incurred after the year of original
default, it would not be recorded in the lender loan transaction accounts.]




                                                 - 19 -
Computations necessary to determine the amounts for the journal entries are set forth below
and on the next page. Transaction numbers from which amounts are taken are included in
parentheses under the "items" column.

For loans A and B:
                         Principal - - - - - - - -                 Interest - - - - - - - - -
Items                    Loan A          Loan B         Total      Loan A        Loan B Total

Assumption (trans. #5) $100,000         $80,000         $180,000   $50,000    $20,000 $70,000
Accrued interest (tr. #7)                                            10,000      8,000 18,000
Collections (trans. #8)                                             -20,000     -5,000 -25,000

  Totals                 $100,000       $80,000         $180,000   $40,000    $23,000 $63,000

For loans C and D:

                         Principal - - - - - - - -                  Interest - - - - - - - - -
Items                    Loan C         Loan D           Total     Loan C        Loan D Total

Assumption (trans. #5)   $75,000        $70,000         $145,000 $60,000      $45,000 $105,000
Accrued interest (#7)                                              7,500         7,000  14,500
Collections (#8)                                                   -9,000       -6,000   15,000
Total receivables
  on the books           $75,000        $70,000         $145,000   $58,500    $46,000 $104,500

Application of value
received (from prior page)
to first interest and
then principal                   0      -34,000         -34,000    -23,000        -46,000   -69,000

Amounts remaining to
be collected from
borrowers or written
off                      $75,000        $36,000         $111,000   $35,500    $         0   $35,500

The journal entries necessary to effect the transaction follow.

Budgetary entry
 None




                                                     - 20 -
Proprietary entry—Loans A and B
 1399 Allowance for Subsidy                                             136,000
 1551 Foreclosed Property                                               110,000
     1559 Foreclosed Property - Allowance                                                  3,000
     1340 Loan Interest Receivable                                                        63,000
     1350 Loans Receivable                                                               180,000

[Note that the $136,000 difference between (1) the principal and interest on the loans ($243,000)
and (2) the estimated fair market value of the properties, net of liens ($107,000), is written off
against Allowance for Subsidy.]

Proprietary entry—Loans C and D
 1551 Foreclosed Property                                               105,000
     1559 Foreclosed Property - Allowance                                                  2,000
     1340 Loan Interest Receivable                                                        69,000
     1350 Loans Receivable                                                                34,000

After these entries are made, a summary of key information related to the loans is shown in the
table below.

                                                             Collateral Escrow
Loan                  Principal     Interest      Liens      Property   Advances

A                     $ 0          $0             $ 0        $ 70,000    $ 0
B                        0           0            3,000        40,000      0
C                     75,000       35,500         2,000        25,000     50
D                     36,000         0              0          80,000      0

[Note that the principal and interest on loans A and B is zero because, since the property was
seized without recourse, its seizure was in full settlement of principal and interest due. The
government cannot collect any additional amounts from the borrowers involved.]

13. Liens on the seized collateral property were paid in full.

Budgetary entry
 4610 Allotments - Realized Resources                                      5,000
   4902 Expended Authority - paid                                                          5,000

[Note: The item could first have been obligated.]




                                               - 21 -
{Subsidiary Apportionment Ledger entries:

 Objects                    Allotments                Expended Authority

 Operating Exp.            ($5,000)                       $5,000}

Proprietary entry
 1559 Foreclosed Property - Allowance                                  5,000
     1010 Fund Balance with Treasury                                                   5,000

14. Repairs which added value to the properties were incurred and paid, as shown below.


Repairs to property for loan:     A      $20,000
                                  B       15,000
                                  C       10,000
                                  D        5,000

                                          $50,000


Budgetary entry
 4610 Allotments - Realized Resources                                 50,000
     4902 Expended Authority - paid                                                  50,000

[The authority could have first been obligated.]

{Subsidiary Apportionment Ledger entries:

 Objects                   Allotments                 Expended Authority

 Operating Exp.            ($50,000)                      $50,000}

Proprietary entry
 1551 Foreclosed Property                                             50,000
     1010 Fund Balance with Treasury                                                 50,000



[The repairs could first have been accrued as accounts payable, in which case the debit would
be to Accounts Payable.]


                                             - 22 -
15. Property C was rented, with $6,000 due and collected from the tenants.

Budgetary entry
  4264 Actual Collections of Rent                                         6,000
      4060 Anticipated Non-Federal Collections                                           6,000

 Proprietary entry
  1010 Fund Balance with Treasury                                         6,000
      1399 Allowance for Subsidy                                                         6,000

16. Incidental maintenance expenses—lawn care, guard services, and miscellaneous
other—were incurred. Per agreement between the agency and OMB, these were properly
considered administrative expenses and were paid by the program fund. Hence, the financing
fund has no entry to make. [Agencies should confer with OMB to determine the proper
classification and funding of maintenance expenses for their programs.]

17. The properties were sold for $350,000, as shown in the table below.

                                                                                  (7) = (2)
                                                                                   minus [(3)
(1)     (2)          (3)                 (4)            (5)            (6)         thru (6)]

                     Capitalized         Amounts applied to:                   Net Gain
Loan    Proceeds     Prop. Value(a)      Principal Interest             Escrow or (Loss)

 A      $100,000     $ 90,000            $ 0            $ 0            $ 0        $ 10,000
 B        30,000       55,000              0              0              400        (25,000)
        $130,000     $145,000            $ 0            $ 0             $ 0       $(15,000)

 C      $150,000      $ 35,000           $ 75,050 $ 35,500                $0        $ 4,450
 D        70,000        85,000                  0        0              100         (15,000)
        $220,000     $120,000            $ 75,050 $ 35,500             $ 500      $ (10,450)


(a)
  Sum of the fair market value of the property in transaction #12 plus capitalized repairs made
in transaction #14.




                                               - 23 -
Budgetary entries

 (1) To record the sales proceeds
 4265 Actual collections of Sales Proceeds                               350,000
     4060 Anticipated Non-Federal Collections                                             350,000

- and-

(2) To expend the authority for returning net monies to the
  borrowers.
 4610 Allotments - Realized Resources                                       4,450
     4901 Expended Authority - unpaid                                                       4,450

[The amount is the $4,500 gain minus the 50 escrow disbursement for Borrower C.]

{Subsidiary Apportionment Ledger entries:

 Objects                           Allotments                 Expended Authority

 Operating Exp.                    ($4,450)                               $4,450}

Proprietary entry—Loans A and B
 1010 Fund Balance with Treasury                                         130,000
 1399 Allowance for Subsidy                                               15,000
     1551 Foreclosed Property                                                             145,000

[Note that the debit to Allowance for Subsidy is the difference between the $10,000 gain
attributable to collateral property for Loan A and the $25,000 loss attributable to collateral
property for Loan B.]

Proprietary entry- Loan C and D
 1010 Fund Balance with Treasury                                         220,000
 1350 Loans Receivable [Loan D]                                           15,000
     1551 Foreclosed Property                                                             120,000
     1350 Loans Receivable [Loan C]                                                        75,050
     1340 Loan Interest Receivable [Loan C]                                                35,500
     2110 Accounts Payable [to Borrower C]                                                  4,450

[Note that the $4,500 gain on the Loan C transactions is owed back to the borrower because
the collateral property was seized with recourse. The $15,000 loss on Loan D transactions is



                                                - 24 -
an additional amount due the government because the collateral property for that loan too was
seized with recourse to recover the loss.]

18. The agency notified Borrower D of the disposition of his property and demanded the
remaining $51,000. The borrower paid $1,000, and the remainder of the loan was written off.

Budgetary entry
 4262 Actual Collections of Loan Principal                             1,000
     4060 Anticipated Non-Federal Collections                                          1,000


Proprietary entries
 1010 Fund Balance with Treasury                                       1,000
     1350 Loans Receivable                                                             1,000
 and
 1399 Allowance for Subsidy                                           50,000
     1350 Loans Receivable                                                           50,000

19. Disbursed the gain owing to Borrower C

Budgetary entry

4901 Expended Authority - unpaid                                       4,450
    4902 Expended Authority - paid                                                    4,450

Proprietary entry
 2110 Accounts Payable                                                 4,450
     1010 Fund Balance with Treasury                                                   4,450




                                             - 25 -
21. Interest received from Treasury amounted to $40,000

Budgetary entry
 4273 Actual Collections of Treasury Interest                           40,000
     4070 Anticipated Federal Collections                                               40,000

Proprietary entry
 1010 Fund Balance with Treasury                                        40,000          40,000
     5300 Interest Income - Treasury

22. As all seized loans and collateral have been settled, the balance of the Allowance for
Subsidy account, $206,000, was returned to the Loan Guarantee Liability account. [Note that
the $206,000 balance is derived from posting the above transactions, which affect the
allowance account.] Return Escrow money to Borrowers B and D.

 Budgetary entry
 None

Proprietary entry
 1399 Allowance for Subsidy                                           206,000
     2180 Loan Guarantee Liability                                                    206,000


Escrow

2400 Liability to Disburse Escrow Cash                                   500
    1190 Escrow Cash                                                                    500

23. $72,500 of interest expense on the loan guarantee liability of the Financing Fund should
be recognized. This pertains to the entire loan guarantee liability of the fund.

Budgetary entry
None

Proprietary entry
 6330 Interest Expense - Loan Guarantee Liability                       72,500
      2180 Loan Guarantee Liability                                                     72,500

24. Private lenders reported that during the year, an additional $100,000 of principal had been
collected on loans guaranteed by the agency.



                                            - 26 -
Budgetary entry
None

Lender Loan Transactions entry
 8065 GL - Principal Reductions                                        100,000
     8050 GL - Principal Outstanding                                                  100,000

Proprietary entry
None

Pre-closing trial balances at September 30, 1997, are set forth below, followed by closing
entries, post-closing trial balance and Budgetary and Proprietary reports.


                          Pre-Closing Budgetary Trial Balance
           (including selected zero balance accounts for illustrative purposes)


 4060   Anticipated Non-Federal Collections             $     2,000
 4070   Anticipated Collections from Federal Sources              0
 4201   Total Actual Resources                              495,000
 4261   Actual Collections of Fees                            1,000
 4262   Actual Collections of Loan Principal                  1,000
 4263   Actual Collections of Loan Interest                  40,000
 4264   Actual Collections of Rent                            6,000
 4265   Actual Collections of Sales Proceeds                350,000
 4273   Actual Collections of Treasury Interest              40,000
 4450   Unapportioned Authority - Available                               $ 495,000
 4510   Apportionments                                                            0
 4610   Allotments - Realized Resources                                      30,500
 4902   Expended Authority - Paid                                          409,500
                                                              $ 935,000   $ 935,000




                                            - 27 -
               Pre-Closing Apportionment Ledger Subsidiary Information

                                    Operating
 Status                Defaults     Expenses              Total

 Apportionments     $ 0             $ 0                   $0
 Allotments           0             30,500                30,500
 Undelivered Orders   0                0                   0
 Expended authority 350,000          59,500                409,500

 Totals                $350,000     $90,000               $440,000




                           Pre-Closing Proprietary Trial Balance
                (including zero balance accounts for illustrative purposes)


  1010    Fund Balance with Treasury          $ 523,500
  2180    Loan Guarantee Liability                                $523,500
  5300    Interest Income - Treasury                                40,000
  5300    Interest Income - Borrowers                               32,500
  6330    Int. Expense - Loan Guar. Liab.        72,500
                                              $ 596,000           $ 596,000


[Note also that Escrow Cash, account 1190, and Liability to Disburse Escrow Cash, account
2400, are both zero. These accounts would appear on a balance sheet prepared for the
escrow deposit fund, which would have a Treasury symbol separate from that for the financing
fund, and for the consolidated balance sheet for the program, financing, escrow, and (if
applicable) liquidating funds.]

Additional subsidiary information regarding Fund Balance with Treasury related to financing
fund transactions is shown below (related budgetary categorizations are indicated in
parentheses). That some of the numbers in the cash receipts and disbursement summary are
identical is strictly coincidental.




                                               - 28 -
Closing entries are set forth below.

Budgetary entries

 C-1. To record consolidation of actual net funded resources
 4201 Total Actual Resources                                   438,000
    4273 Actual Collections of Treasury interest                          40,000
    4261 Actual Collections of Fees                                        1,000
    4262 Actual Collections of Loan Principal                              1,000
    4263 Actual Collections of Loan Interest                              40,000
    4264 Actual Collections of Rent                                        6,000
    4265 Actual Collections of Sales Proceeds                            350,000

 C-2. To record consolidation of unapportioned resoures and
anticipated resources
 4610 Allotments - Realized Resources                           30,500
     4070 Anticipated Collections of Treasury Interest                         0
     4060 Anticipated Collections of Loan Principal                        2,000
     4450 Unapportioned Authority - Available                             28,500

{Subsidiary Apportionment Ledger entries:

 Objects                    Allotments

 Operating Exp.             ($30,500)}

C-3. To close expended authority
 4902 Expended Authority - Paid                                409,500
     4201 Total Actual Resources                                         409,500


{Subsidiary Apportionment Ledger entries:

 Objects                   Expended Authority

 Defaults                  ($350,000)
 Operating Exp.            (59,500)}




                                            - 29 -
Memorandum entry
  8070 (GL) Net Disbursements                                                        425,000
        8065 (GL) Principal Reductions                                                            425,000


Proprietary entry
 5300 Interest Income - Treasury                                                         40,000
 5300 Interest Income - Borrowers                                                        32,500
     6330 Interest Expense - Loan Guar. Liab.                                                      72,500


Post-closing budgetary, lender loan transaction, and proprietary trial balances are set forth
below.

                                   Loan Guarantee Financing Fund
                                      Budgetary Trial Balance
                                        September 30, 1997

 4201 Total Actual Resources                                       $523,500
 4450 Unapportioned Authority                                                   $523,500
                                                                   $523,500     $523,500




                                   Loan Guarantee Financing Fund
                                      Proprietary Trial Balance
                                        September 30, 1997
 1010 Fund Balance with Treasury                                   $523,500
 2180 Loan Guarantee Liability                                                $523,500
                                                                   $523,500   $523,500




                                   Financing Fund Memorandum
                                            Trial Balance
                                        September 30, 1997
 8050 Guaranteed Loan Principal Outstanding                        $450,000
 8070 GL - Net Disbursements                                                  $450,000
                                                                   $450,000   $450,000




                                                - 30 -
BUDGETARY FINANCIAL STATEMENTS

The following budgetary statements are presented for the financing fund only beginning on the
next page.

• An SF-133, "Statement of Budget Execution"

• An FMS-2108, "Year-End Closing Statement"

• A Program and Financing Schedule.




                                           - 31 -
                   SF-133 REPORT ON BUDGET EXECUTION
                     LOAN GUARANTEE FINANCING FUND
                             September 30, 1997
BUDGETARY RESOURCES

1.   BUDGET AUTHORITY
     A. Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
     B. Borrowing Authority
     C. ContractAuthority
     D. Net Transfers, Current Year Authority (+ or -)
     E. Other

2.   UNOBLIGATED BALANCE
     A. Brought Forward October 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495,000
     B. Net Transfers Prior Year Balance, Acutal (+ or -)
     C. Anticipated Transfers Prior Year Balance (+ or -)

3.   SPENDING AUTHORITY FROM OFFSETTING COLLECTIONS
     A. Earned:
        1. Collect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   438,000
        2. Receivable from Federal Sources
     B. Change in Unfilled Customer Orders:
        1. Advance Received (+ or -)
        2. Without Advance from Federal Sources
     C. Anticipated for Rest of Year:
        1. Advance for Anticpated Order
        2. Without Advance
     D. Transfers from Turst Funds:
        1. Collected
        2. Anticipated

4.   RECOVERIES OF PRIOR YEAR OBLIGATIONS
     A. Actual
     B. Anticipated

5.   TEMPORARILY NOT AVAILABLE PURSUANT TO PUBLIC LAW ____

6.   PERMANENTLY NOT AVAILABLE
     A. Cancellations of Expired and No-Year Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
     B. Enacted Rescissions of Prior Year Balances (-)
     C. Capital Transfers and Redemption of Debt (-) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
     D. Other Authority Withdrawn (-)
     E. Pursuant to Public Law ___________
     F. Anticipated for Rest of Year (+ or -) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.   TOTAL BUDGETARY RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         933,000



                                                                    - 32 -
                                         SF-133 REPORT ON BUDGET EXECUTION
                                                     (CONTINUED)


8.  OBLIGATIONS INCURRED
    A. Category A, Direct Obligations
    B. Category B, Direct Obligations
       (1) Default Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,000
       (2) Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,500
       (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    C. Not Subject to Apportionment
    D. Reimbursable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
                                                                                                                                           409,500
9. UNOBLIGATED BALANCE AVAILABLE
    A. Apportioned
       1. Balance Currently Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,500
       2. Anticipated
    B. Exempt From Apportionment
    C. Other Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495,000
                                                                                                                                           523,500
10. UNOBLIGATED BALANCE NOT AVAILABLE
    A. Apportioned for Subsequent Periods
    B. Deferred
    C. Withheld Pending Rescission
    D. Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11. TOTAL STATUS OF BUDGETARY RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 933,000

      RELATION OF OBLIGATIONS TO OUTLAYS

12. OBLIGATED BALANCE, NET AS OF OCTOBER 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13. OBLIGATED BALANCE TRANSFERRED, NET (+ or -)

14. OBLIGATED BALANCE, NET, END OF PERIOD
    A. Accounts Receivable (-)
    B. Unfilled Customer Orders (-):
       1. Federal Sources Without Advance
       2. Federal Sources With Advance
       3. Non-Federal Sources With Advance
    C. Undelivered Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    D. Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. OUTLAYS:
    A. Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,500
    B. Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438,000




                                                                      - 33 -
                                              SGL CROSSWALK
                                              30 September ASY

SF-133 REPORT ON BUDGET EXECUTION FOR LOAN GUARANTEES


Federal Resources:

     Line    2a                  4201 Total Actual Resources
                                 - 4801 Undelivered Orders - Unpaid

     Line    3a                  4261 Actual collections of Fees
                                 4262 Actual collections of Loan Principal
                                 4263 Actual collections of Loan Interest
                                 4264 Actual collections of Rent
                                 4265 Actual collections of Sales Proceeds
                                 4273 Actual collections of Treasury Interest

     Line    6c                  4147 Actual Payments to Treasury

     Line     7                  Computation


     Line    8b1                 4801 Undelivered Orders - Unpaid* (E-B)
                                 4902 Expended Authority - Paid*(E-B)

     Line    8b2                 4801 Undelivered Orders - Unpaid* (E-B)
                                 4902 Expended Authority - Paid*(E-B)


     Line 11                     Computation

     Line 12                     4801 Undelivered orders - Unpaid (B)

     Line 15a                    4902 Expended Authority - Paid

     Line   15b                  4261 Actual collections of Fees
                                 4262 Actual collections of Loan Principal
                                 4263 Actual collections of Loan Interest
                                 4264 Actual collections of Rent
                                 4265 Actual collections of Sales Proceeds
                                 4273 Actual collections of Treasury Interest

* Agencies must use subsidiary ledgers or additional data elements to provide the necessary breakout within these
accounts.




                                                      - 34 -
                                            PROGRAM AND FINANCING SCHEDULE
                                                  PROGRAM ACCOUNT

      Obligations by program activity

00.01        Default Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,000
00.02        Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,500
10.00        Total obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,500

     Budgetary resources available for obligation
21.90    Unobligated Bal, SOY (Fund Bal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495,000
22.00    New budget authority (gross) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440,000
23.95    New obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,500

     New budget authority (gross), detail:
     Current:
68.00     Offsetting Collections (cash) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438,000
68.27     Capital Transfer to general fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68.90     Spending Authority from Offsetting Collections (total) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438,000

     Change in unpaid obligations
72.90    Obligated Balance, SOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73.10    New obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,500
73.20    Total outlays (gross) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,500

     Outlay (gross), detail:
86.90    Outlays from new current authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,500
86.98    Outlays from permanent Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87.00    Total outlays (gross) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,500

88.00        Offsetting collections from Federal sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000

     Net Budget Autority and Outlays
89.00    Budget authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 933,000
90.00    Outlays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,500




                                                                         - 35 -
                                 SGL CROSSWALK
                                  30 September ASY


PROGRAM AND FINANCING SCHEDULE FOR LOAN GUARANTEES

   Line 00.01       4801 Undelivered Orders*- Unpaid
                    4901 Expended Authority*- Unpaid
                    4902 Expended Authority*- Paid

   Line 10.00       Computation (should be the same as 73.10)

   Line 21.90       4201 Ttoal Actual Resources
                    -4801 Undelivered Orders - Unpaid

   Line 22.00       4271 Actual Subsidy Collections
                    4273 Actual Treasury Interest

   Line 23.95       4801 Undelivered Orders - Unpaid
                    4901 Expended Authority - Unpaid
                    4902 Expended Authority -Paid

   Line   68.00     4273 Actual Treasury Interest

   Line   68.27     4147 Actual Payments to Treasury

   Line   68.90     Computation (Line 68.00 - Line 68.27)

   Line 72.90       4801 Undelivered Orders - Unpaid (B)

   Line   73.10     4902 Expended Authority - Paid
                    4801 Undelivered orders - Unpaid (E-B)

   Line 73.20       4902 Expended Authority - Paid

   Line 86.90       Computation (Line 73.10 - line 72.90)

   Line   86.98     Computation (Line 73.20 - Line 73.10)

   Line 87.00       4902 Expended Authority - Paid

   Line 88.00       4271 Actual Subsidy Collections
                    4273 Actual Treasury Interest

   Line 89.00       Computation (Line 21.90 + Line 22.00 - Line 88.00)

   Line 90.00       Computation (Line 87.00 - Line 88.00)

                                        - 36 -
CONSOLIDATED FINANCIAL STATEMENTS—YEAR 1

Department/Agency
Reporting Entity
STATEMENT OF FINANCIAL POSITION
as of 30 September, Year 1997
(Dollars)

ASSETS
Entity Asset:
 Intragovernmental Items, Federal
   Fund Balance with Treasury (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $523,500
   Investments (Note 4)
   Accounts Receivable, Net (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
   Interest Receivable (net)
   Other assets (Note 6)

 Governmental
   Investments (Note 4)
   Accounts Receivable, net (Note 5)
   Interest Receivable (net)
   Credit program receivables and related foreclosed property, net (Note 7)
   Cash and other monetary assets (Note 3)
   Inventory and related property, net (Note 8)
   General property, plant, and equipment, net (Note 9)
   Other assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total entity assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $523,500

Non-Entity Assets:
Intragovernmental
   Fund balance with Treasury (Note 2)
   Accounts receivable, net (Note 5)
   Interest receivable (net)
   Other assets (Note 6)

Governmental
   Accounts receivable, net (Note 5)
   Interest receivable (net)
   Cash and other monetary assets (Note 3)
   Other assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total non-entity assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $523,500


                                                                        - 37 -
LIABILITIES
Liabilities Covered by Budgetary Resources:
 Intragovernmental liabilities:
    Accounts payable
    Interest payable
    Other intragovernmental liabilities (Note 11)

Governmental Liabilities:
   Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
   Interest payable
   Liabilities for loan guarantees (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523,500
   Lease liabilities (Note 12)
   Pensions, other retirement benefits and other
    Post-employment benefits (Note 13)
   Insurance liabilities (Note 14)
   Other governmental liabilities (Note 11)deferred Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities covered by budgetary resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523,500

Liabilities not Covered by Budgetary Resources:
Intragovernmental liabilities:
   Accounts payable
   Debt (Note 10)
   Other intragovernmental liabilities (Note 11)

 Governmental liabilities:
   Accounts payable
   Debt (Note 10)
   Lease liabilities (Note 12)
   Pensions, other retirement benefits and other
    post-employment benefits (Note 13)
   Insurance liabilities (Note 14)
   Other governmental liabilities (Note 11)
Total liabilities not covered by budgetary resources
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $523,500

NET POSITION
Unexpended Appropriations (Note 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative Results of Operations
Total Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Liabilities and Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $523,500




                                                                    - 38 -
CONSOLIDATED FINANCIAL STATEMENTS—YEAR 1
SGL X-WALK

Department/Agency
Reporting Entity
STATEMENT OF FINANCIAL POSITION
as of 30 September, Year 1
(Dollars)

ASSETS
Entity Asset:
 Intragovernmental Items, Federal
   Fund Balance with Treasury (Note 2) 1010 Fund Balance with Treasury
   Investments (Note 4)
   Accounts Receivable, Net (Note 5)
   Interest Receivable (net)
   Other assets (Note 6)

 Governmental
   Investments (Note 4)
   Accounts Receivable, net (Note 5)
   Interest Receivable (net)
   Credit program receivables and related foreclosed property, net (Note 7)
   Cash and other monetary assets (Note 3)
   Inventory and related property, net (Note 8)
   General property, plant, and equipment, net (Note 9)
   Other assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total entity assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Non-Entity Assets:
Intragovernmental
   Fund balance with Treasury (Note 2)
   Accounts receivable, net (Note 5)
   Interest receivable (net)
   Other assets (Note 6)

Governmental
   Accounts receivable, net (Note 5)
   Interest receivable (net)
   Cash and other monetary assets (Note 3)
   Other assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total non-entity assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



                                                               - 39 -
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
LIABILITIES
 Liabilities Covered by Budgetary Resources:
 Intragovernmental liabilities:
    Accounts payable
    Interest payable
    Other intragovernmental liabilities (Note 11)

 Governmental Liabilities:
   Accounts payable
   Interest payable
   Liabilities for loan guarantees (Note 7) 2180 Loan Guarantee Liability
   Lease liabilities (Note 12)
   Pensions, other retirement benefits and other
    Post-employment benefits (Note 13)
   Insurance liabilities (Note 14)
   Other governmental liabilities (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities covered by budgetary resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liabilities not Covered by Budgetary Resources:
Intragovernmental liabilities:
   Accounts payable
   Debt (Note 10)
   Other intragovernmental liabilities (Note 11)

  Governmental liabilities:
    Accounts payable
    Debt (Note 10)
    Lease liabilities (Note 12)
    Pensions, other retirement benefits and other
     post-employment benefits (Note 13)
    Insurance liabilities (Note 14)
    Other governmental liabilities (Note 11)
 Total liabilities not covered by budgetary resources
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

NET POSITION
Unexpended Appropriations (Note 15)
Cumulative Results of Operations
Total Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Liabilities and Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $



                                                                 - 40 -
Department/Agency
Reporting Entity
CONSOLIDATING STATEMENT OF NET COST
as of 30 September, Year 1997
(Dollars)

                                                     Intra-
                            Sub-          Sub-       agency    Consol-
                            organi-       organi-    elimin-   idated
                            zation A      zation B   ations    Totals
COSTS:
Crosscutting Programs
   Program A:
      Intragovernmental $ 72,500                $          $         $
      With the Public
               Total      72,500
      Less earned revenue 72,500
      Net program costs

   Other Programs (Note XX)
   Program B:



Costs not assigned to programs

Less earned revenues not
   attributed to programs

DEFERRED MAINTENANCE (Note X)

NET COSTS OF OPERATIONS            0




                                       - 41 -
Department/Agency
Reporting Entity
CONSOLIDATING STATEMENT OF NET COST
SGL X-WALK


                                                       Intra-
                            Sub-           Sub-        agency      Consol-
                            organi-        organi-     elimin-     idated
                            zation A       zation B    ations      Totals
COSTS:
Crosscutting Programs
   Program A:
      Intragovernmental $ 6330 Interest Expense- Guarantee Liability (F)

      With the Public
              Total
      Less earned revenue 5300 Interest Income - Treasury (F)

      Net program costs

   Other Programs (Note XX)
   Program B:



Costs not assigned to programs

Less earned revenues not
   attributed to programs

DEFERRED MAINTENANCE (Note X)

NET COSTS OF OPERATIONS




                                        - 42 -
Depart/agency
Reporting entity
CONSOLIDATING STATEMENT OF CHANGES IN NET POSITION
For the year ended September 30


                                                      Intra-
                             Sub-          Sub-       agency    Consol-
                             organi-       organi-    elimin-   idated
                             zation A      zation B   ations    Totals

Net Cost of Operations    $0               $          $         $
Financing Sources (other
than exchange revenues)
   Appropriations Used      0
   Taxes
   Donations
   Imputed financing
   Transfers-in
   Transfers-out
Net Results of Operations 0

Prior period Adjustments
Net Change in Cumulative
Results of Operations

Increase (decrease) in
Unexpended Approrpiations

Change in Net Position

Net Position-Beginning of Period 0

Net Position-End of Period     0




                                        - 43 -
Depart/agency
Reporting entity
CONSOLIDATING STATEMENT OF CHANGES IN NET POSITION
SGL X-WALK

                                                      Intra-
                             Sub-          Sub-       agency    Consol-
                             organi-       organi-    elimin-   idated
                             zation A      zation B   ations    Totals

Net Cost of Operations    $ From NET COSTS            $         $         $
Financing Sources (other
than exchange revenues)
   Appropriations Used
   Taxes
   Donations
   Imputed financing
   Transfers-in
   Transfers-out
Net Results of Operations

Prior period Adjustments
Net Change in Cumulative
Results of Operations

Increase (decrease) in
Unexpended Appropriations
Change in Net Position

Net Position-Beginning of Period 0

Net Position-End of Period




                                        - 44 -
Department/agency
Reporting entity
STATEMENT OF BUDGETARY RESOURCES
For the year ended September 30,

                                                        19x1           19xx
Budgetary Resources:

Budget authority (line 1)                               $              $
Unobligated balances-beginning
       of period (line 2A)                              495,000
Spending authority from offsetting
       Collections (line 3)                             438,000
Adjustments (lines 4-6)
Total budgetary resources (line 7)                      933,000

Status of Budgetary Resources:

Obligations incurred (line 8)                           409,500
Unobligated balances-available (line 9)                   28,500
Unobligated balances-not available (line 10)             495,000
Total, status of budgetary resources (line 11)           933,000

Outlays:

Obligations incurred (line 8)                           409,500
Less: Spending authority from offsetting                438,000
       collections and adjustments
       (Lines 3A,B,D, & 4A)
Obligated balance, net - beginning of period
       (Line 12)
Obligated balance transferred, net (line 13)
Less: obligated balance, net - end of period
       (Line 14)
Total Outlays (line 15)                                     (28,500)




                                               - 45 -
Department/agency
Reporting entity
STATEMENT OF FINANCING
For the year ended September 30, 19xx

Obligations and Nonbudgetary Resources

    Obligations incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,500
    Less: Spending authority for offsetting
          collections and adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438,000
    Donations not in the budget
    Financing imputed for cost subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    Transfers-in (out)
    Exchange revenue not in the budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    Other
          Total obligations as adjusted, and
             Nonbudgetary resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,500)

Resources That Do Not Fund Net Cost of Operations

    Change in amount of goods, services, and
         benefits ordered but not yet
         received or provided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    Costs capitalized on the balance sheet
    Financing sources that fund costs of
         prior periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,500
         Total resources that do not fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,500
            Net cost of operations

Costs That Do Not Require Resources

    Depreciation and amortization
    Revaluation of assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
         Total costs that do not require resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financing Sources Yet to be Provided

Net Cost of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              0




                                                              - 46 -
Department/agency
Reporting entity
STATEMENT OF FINANCING
For the year ended September 30, 19xx

Obligations and Nonbudgetary Resources

    Obligations incurred 4801 Undelivered Orders-Unpaid + 4901 Expended Auth - Unpaid
                             +4902 Expended Auth - Paid
    Less: Spending authority for offsetting
          collections and adjustments 4261 Actual Fees collected + 4271 Actual Subsidy
          collected + 4273 Actual Treasury Interest Collected
    Donations not in the budget
    Financing imputed for cost subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    Transfers-in (out)
    Exchange revenue not in the budget
    Other
          Total obligations as adjusted, and
             Nonbudgetary resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Resources That Do Not Fund Net Cost of Operations

    Change in amount of goods, services, and
         benefits ordered but not yet
         received or provided 4801 Undelivered Orders-unpaid(B-E)
    Costs capitalized on the balance sheet
    Financing sources that fund costs of
         prior periods
    Other 2180 Loan Guarantee Liability (End Bal-beg Bal)
         Total resources that do not fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
            Net cost of operations

Costs That Do Not Require Resources

    Depreciation and amortization
    Revaluation of assets and liabilities
    Other
          Total costs that do not require resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financing Sources Yet to be Provided

Net Cost of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,030



                                                          - 47 -
NOTES TO THE FINANCIAL STATEMENTS

Note 2. Fund Balances with Treasury:

A. Fund Balances:
                                                  Entity         Non-Entity
                                                  Assets         Assets       Total
(2) Revolving Funds                               $ 523,500             0     $523,500
(3) Appropriated Funds                                    0             0             0
         Total                                       523,500            0      523,500


Note 7. Loans and Loan Guarantees, Non-Federal Borrowers:
B1. Direct Loans Obligated Prior to FY 1992 (Present Value Method):

                                                                                          Value of
                                                                                          Assets
           Loans                                                       Present            Related
Loan       Receivable,       Interest             Foreclosed           Value              Direct
Programs Gross               Receivable           Property             Allowance          Loans


B2. Direct Loans Obligated Prior to FY 1992 (Allowance for Loss Method):

                                                                                          Value of
                                                                                          Assets
           Loans                                           Allowance                      Related to
Loan       Receivable,       Interest                      For Loan    Foreclosed         Direct
Programs Gross               Receivable                    Losses      Property           Loans




F. Guaranteed Loans Outstanding:
                                                  Outstanding          Amount of
                                                  Principal,           Outstanding
                                                  Guaranteed Loans,    Principal
         Loan Programs                            Face Value           Guaranteed

         (1)                                      $ 450,000            $ 315,000* (70%)
         (2)
          Total



                                                  - 48 -
G1. Liability for Loan Guarantees (Present Value Method, pre 1992):
                                                          Liabilities for
                             Liabilities for              Loan Guarantees      Total
                             Losses on Pre-1992 for Post-1991 Liabilities
                             Guarantees,                  Guarantees,          for Loan
         Loan Programs       Present Value                Present Value        Guarantees

         (1)                   $                             $                 $
         (2)
          Total

G2. Liability for Loan Guarantees (Estimated Future Default Claims, pre 1992):
                                                                 Liabilities for
                                 Liabilities for                 Loan Guarantees       Total
                                 Losses on Pre-1992              for Post-1991         Liabilities
                                 Guarantees, Estimated           Guarantees,           for Loan
         Loan Programs           Future Default Claims           Present Value         Guarantees

         (1)                        $                            $       523,500       $ 523,500
         (2)
          Total


I. Subsidy Expense for Post-1991 Loan Guarantees:

1. Current Year's Loan Guarantees
                                    Interest
Loan                                Supple-
Programs Defaults       Fees        ments                        Other         Total




 2.       Loan Guarantee Modifications and Re-estimates
Loan Programs          Modifications                    Re-estimates

(1)




                                                    - 49 -
3.         Total Loan Guarantee Subsidy Expense

Loan Programs

(1)                              0
           Total                 0


J. Administrative Expenses:
 Loan Guarantees
 Loan Programs

      Total $




                                      * * *E N D O F C A S E* * *




                                                  - 50 -

				
DOCUMENT INFO
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